Getting Closer
to EU Membership

An Interview with Endre Juhász, Ambassador of
Hungary to the EU and
Chief Negotiator for Accession.*

1. Hungary was the first of the Central and Eastern European countries to apply for accession in 1994. What were the main reasons that led Hungary to ask for membership in the EU?

The reasons for submitting the application for membership of the European Union were of many kinds: historic, political, economic, social and psychological.
Saint Stephen, the first Hungarian Christian king, was crowned in the year 1000 with a crown sent by Pope Sylvester II; ever since then Hungary has been part of Europe. Due to geopolitical forces beyond our control, we were separated from it after the Second World War for about forty years. This was, of course, a political separation because emotionally, culturally and obviously geographically we continued to belong to Europe. For many of us, joining the European Union is a "return to Europe", as far as political structures are concerned.
Through membership Hungary seeks security and increased political and economic stability. We are located in the neighbourhood of a turbulent region, the Balkans. Nor can we rule out other threats from other parts of the world that emerge in the future, even if we cannot identify them at this moment. Similar considerations motivated our efforts to achieve NATO membership, which we did in 1999.
There was a realization that without membership it would be difficult to carry out the restructuring and the modernization of the economy, that is, to develop an economy capable of operating successfully in a globalized world. Just after the change of the political regime, Hungary was short of capital. Now, the total value of foreign direct investments in Hungary exceeds EUR 21 billion. I am convinced that a large part, perhaps even half of it, would not have come to this country, had we not set ourselves the objective of full EU membership. The Hungarian market is small, alone it would not have provided sufficient motivation for foreign investors. But the prospects of the huge European market after accession are very attractive. In addition, large multinational companies need safe, stable and possibly uniform conditions and these can only be provided by the European Union.
Both the foreign companies operating in Hungary and our own domestic companies need unrestricted market access within the European Union. This is particularly important in the agricultural area. Under the Europe Agreement, free trade in industrial products has already been established. This has not yet been achieved fully for agricultural products. Hungarian agriculture can exploit its full potential when it has unlimited access to the Single Market.
Finally, we really believe that the European Union will not harm our national identity but, on the contrary, it will help us preserve it. Without membership this country would be exposed to the raw forces of globalization. The European Union is creating a better environment in which national identity is protected and individual cultures can flourish.

2. What is the general public opinion in Hungary about accession in the EU? What communication strategy is your government implementing in order to promote better understanding of the enlargement process?

The Hungarian public has always been supportive of the country's accession to the European Union and had a generally positive view of European integration. Last year SZONDA-IPSOS, a specialized opinion and market research agency, conducted an extensive public opinion poll on the attitude of the Hungarians. The most important question concerned intentions to vote if a referendum were held on Hungary's accession. The results were convincing: 65 per cent yes, 8 per cent against, the rest not responding or undecided. It also became evident that Hungarians have a positive opinion of the European Union. Seventy-eight per cent thought that the EU would contribute to peace in Europe, only 11 per cent were of a contrary view. Sixty-two per cent believed that it was democratic by its nature, with only 19 per cent of the opposite view. Fifty-eight per cent considered that it was increasing the standard of living, with 26 per cent taking the opposite view. The majority of Hungarians are convinced that accession, on the whole, will bring more benefits to Hungary (68 per cent) than disadvantages (14 per cent). On the other hand, people seem to understand that the effects of membership will be differentiated according to age groups, occupation and other socio-economic characteristics. The poll revealed, for example, that the effects on smallholders or small farmers in the agricultural sector were thought to be more negative (43 per cent) than positive (26 per cent). Pensioners too reacted similarly: negative effects 37 per cent, positive effects 16 per cent.
A recent poll conducted by another institute (GfK Market Research Institute) has shown some decline in support for accession, although the results are still very reassuring: 54 per cent yes, 15 per cent no, the rest not responding or undecided. This decline might be due to technical reasons (differences in the methodology of the poll, etc.). But even if there are real reasons, I do not think that there is evidence of an emerging determined and deliberate opposition. Instead, one can assume that there are signs of some frustration about the slow pace of the accession process and disappointment on account of some EU attitudes.
What is certain is that we cannot be complacent. We cannot take popular support for granted.
Nevertheless, at present the objective of the communication strategy of the government does not aim to convince or to influence, but to inform. We hope that once in possession of the necessary information, people will be able to draw the right conclusions.

3. What inner process do you follow in Hungary to set up negotiating positions? In which way do economic and social sectors at national and regional level participate in the setting up of those positions?

All written negotiating positions are approved by the government itself, in full plenary session of all ministers. At first glance, this seems to be burdensome, but in fact it is not. There is a well-established procedure which has been functioning for a very long time for normal government decision-making. We simply have to follow this procedure. No separate mechanism has been set up for affairs of EU integration.
As regards the level of ministerial responsibility, the Minister of Foreign Affairs has a primary role. He is responsible for the whole process of the accession negotiations. We have no Minister for European Affairs. The Minister of Foreign Affairs personally represents Hungary when the Accession Conference is held at ministerial level.
We have not set up a separate institution for handling European affairs. There is a State Secretariat for European Integration within the Ministry of Foreign Affairs, its head is responsible for internal coordination and preparation, including drawing up the papers to be submitted to the government.
Finally, the Ambassador to the European Union in Brussels, myself, assumes the role of Chief Negotiator. The Chief Negotiator negotiates formally at deputy level at the Accession Conference and informally between sessions. In fact, most of the negotiating is conducted informally through meetings with the services of the European Commission and ambassadors and staff members of the Permanent Representations of the Member States. In addition to personal contacts with his counterparts in Brussels, the Chief Negotiator prepares proposals for his government based on his assessment of the concrete situation on the spot.
Of course, the negotiations are not just about arguments in support of the initial Hungarian negotiating positions. The situation often requires modifying the initial position or presenting a new one very rapidly. When such a decision is needed, it is made by the Prime Minister, if the matter is really important, or by the Minister of Foreign Affairs based on consultations with the State Secretary for European Integration and the Chief Negotiator.
I think that we have a clear and simple hierarchy for formulating decisions. So far it has been functioning well.
The highest forum at national level for the involvement of economic and social partners is the Council of European Integration. At this forum the Minister of Foreign Affairs holds regular consultations with representative organizations, such as trade unions, employers' organizations, chambers of commerce, etc. In addition to the functioning of this forum, all ministers have the obligation to consult economic and social partners when they formulate their positions on matters within their competence.

4. The respect of human rights is one of the conditions for accession set up in the Copenhagen Council in 1993. Hungary has to face the problem of the Roma minority, which feels strongly discriminated against. To deal with it, your country has begun to implement a medium-term Roma action plan. How is it working and what results have already been achieved?

The European Commission has consistently stated in its annual Regular Reports that Hungary fulfils the Copenhagen political criteria. This is also true for the situation of minorities. This does not mean that there is no problem in respect of the Roma. This is an economically and socially disadvantaged group. On the other hand, I am sure that there is no legal or institutional discrimination in Hungary vis-ŕ-vis the Roma. They may be exposed to prejudice, and there are some cases of de facto discrimination. Remedying the problem of the Roma needs time and the implementation of a well considered and elaborate plan. What we have now is a medium-term plan, but very soon Parliament is expected to approve a long-term plan as well.
The implementation of the medium-term plan has already had some positive results: for example, more employment opportunities have been created for the Roma, the number of scholarships granted to the Roma young has dramatically increased. Education and training are primary means for the social elevation of this group. But of course, the programme is far from over.
I would like to emphasize that here we are facing not only a Hungarian but a European problem, and we hope that it will be considered as such by the European Union as well.

5. Hungary is a functioning market economy and should be able to cope with competitive pressure and market forces within the Union. However, although unemployment has fallen, there are significant regional differences and shortages of skilled labour in high growth sectors. What measures is your government adopting in order to face this problem?

The Hungarian economy is doing well. We are in the fourth year in which a high GDP growth rate has been recorded. It was 4.9 per cent in 1998, 4.2 per cent in 1999 and 5.2 per cent last year. Although we do not hope to reach last year's level this year, economic expansion is still expected to be above 4 per cent. The unemployment rate has fallen in recent years, it is below 6 per cent now. Economic growth is sustainable, the external balances of the country are under control.
The Hungarian economy is already well integrated into that of the European Union. Last year's trade figures show that 75 per cent of our exports go to member states of the Union. This figure is higher than the share of internal trade in the exports of most of the current EU member states. Between Hungary and the EU states, free trade has already been established for industrial products, no customs duties or quantitative restrictions apply. In terms of trade Hungary is already almost a member of the European Union.
Of course, we have weaknesses as well. Regional disparities are one of them. In some parts of the country we are experiencing labour shortages, in other regions, in particular in the Eastern and North-Eastern parts of Hungary, the unemployment rate is still well above a level considered acceptable. What are the answers? More jobs have to be created in those areas that have fallen behind. What the government can do is to improve the infrastructure, to train and retrain the workforce. An example: the construction of the M3 Motorway leading eastwards to the border with the Ukraine is in progress. It is expected to facilitate the establishment of new businesses in the proximity of this motorway. The competent agencies engaged in investment promotion are trying to direct more foreign investments into these areas as well. We must increase the internal mobility of the workforce. Traditionally this is very low. People in Hungary are not really willing to leave their home village or city and to settle in agglomerations where there are job opportunities. Finally, we are not opposed to employing foreign workers if a real need arises. An example: the Suzuki Automobile Manufacturing Company in Esztergom (Northern Hungary) is already employing about 200 workers who commute from Slovakia.

6. What is your evaluation about the institutional reform concluded in Nice and the representativity achieved by Hungary in the European institutions (12 votes at the Council and 20 at the European Parliament)?

It is perhaps understandable that we evaluate the Nice Treaty from the perspective of enlargement. From this point of view we are pleased with the results. The Treaty has completed the institutional changes necessary for the accession of new member states. It has removed the last obstacle still existing on the EU side.
As for the substance of the reform, the Nice Treaty might not be a masterpiece, and might not have fulfilled the expectations of those who wanted to see more ambitious results in the way of deepening European integration. But I think it is a step forward. Sometimes procedural changes which look insignificant may gain importance later in practical implementation. I am thinking in particular of matters that have been moved into the scope of qualified majority voting.
It is certainly a disappointment for us that in the distribution of seats in the European Parliament the Member States have agreed to allocate to Hungary 20 seats instead of the 22 seats which the size of our population would justify. According to the results of a recent census, Hungary has 10.2 million inhabitants, more or less the same or even more than Greece, Belgium and Portugal, countries that have been allocated 22 seats. We consider that this allocation is not in accordance with the principle of proportional popular representation and it should be adjusted. I hope that such a correction can and will be made during the course of the accession negotiations.
As to weighting our vote in the Council and the number of seats in the Economic and Social Committee and the Committee of Regions, we are fully satisfied.

7. At the beginning of the year, you said you felt disappointed about the path of negotiations. Now that you have closed 22 chapters, do you have a different opinion? What would be your present evaluation of the enlargement process?

2000 was not really a successful year for us. If we just take the number of closed chapters, altogether five, there was no reason for satisfaction. But I recognize that the number of closed chapters is not the most important indicator for the assessment of progress. Other factors can be more important. Unfortunately, as regards those "other factors", the situation was no better. We found evidence of a reluctance of the European Union to engage in substantial negotiations. By this I mean a process in which clear positions are adopted by both sides, then real efforts are made to reach mutually acceptable solutions, where necessary, through concessions and compromises. In key issues in many chapters, the EU simply avoided adopting a substantive position. This was the case for chapters such as Agriculture, Regional Policy, Free Movement of Persons and, partly, in the Chapter on Justice and Home Affairs. The EU kept asking us questions and requesting additional information, even if it was felt that the issue is clear and ripe for decision. I do not wish to go as far as saying that there was a deliberate slowdown of the negotiations, but I maintain that overall the EU showed an evasive attitude or, at least, did not demonstrate that determination that could have been rightfully and reasonably expected from it by a candidate country.
Facing this situation, during the year 2000 we voiced our concerns or disappointment on many occasions. We tried to make it clear that things could not continue like that for a long time if we want to avert a crisis of the process. I think that our "murmuring" contributed to the realization by EU leaders that a new course had to be taken in the negotiations.
The so called "road map", prepared by the European Commission and endorsed by the Nice European Council, was a crucial instrument in opening the way for more rapid and substantial progress. It has brought on us, both on Hungary and the EU, enormous pressure: now we must state our positions and must seek solutions. This is sometimes very difficult, but this is exactly what we need if we want to complete the negotiations in the foreseeable future.
The other important factor was the programme of the Swedish Presidency. This has been considered overambitious by many observers. But they seem to have underestimated the will and the tenacity of the Swedes.
Finally, we have also been instrumental in achieving a state of negotiations which many consider a breakthrough. I think that while asserting our basic national interests, we have demonstrated the necessary flexibility and sense of compromise. Why is the term "breakthrough" justified? Perhaps by the fact that Hungary has been the first country that has closed all the four chapters regarding the four freedoms (free movement of goods, persons, services and capital), while facing important problems in all of them. (Cyprus has achieved the same results, but for the Free Movement of Persons the EU did not ask for a transitional period. Therefore, an agreement was reached without difficulty.) I am convinced that the four freedoms are still the pillars of the European Union.
Why at that moment was the outcome of the negotiations particularly important? Because the ministerial meeting of the Accession Conference just preceded the Göteborg European Council, and it enabled the Summit to reach positive and encouraging conclusions on the prospects of the accession negotiations. "Provided that the progress towards meeting the accession criteria continues at an unabated pace, the road map should make it possible to complete negotiations by the end of 2002 for those candidate countries that are ready. The ob-jective is that they should participate in the European Parliamentary elections of 2004 as members." We have got a clear and realistic programme to fulfil. Of course, we know that the Summit conclusions do not imply commitments, but they make the process predictable and the perspective of accession tangible. Given all this, our evaluation of the accession negotiations has much improved. Now, our attitude could be called one of cautious optimism.

8. You have been the first Central and Eastern European country to agree to the chapter of the free movement of workers. You have based your agreement on the principle of reciprocity, in other words, the guarantee that Hungary may also be able to apply national measures regarding Member States that limit access for Hungarian workers. Even though you might apply this instrument: do you find it reasonable to wait five to seven years until you are able to exercise this freedom?

First of all, I am sure that we do not have to wait for seven years until Hungarian citizens can freely take up work in the European Union. Even the initial Commission proposal, presented in April, provided a general transitional period of only five years, with the possibility of extending it by a further period of two years if there are serious disturbances in the labour market of a member state. True, under this proposal there was practically no chance of shortening the five years' period, because such a decision would have required unanimity in the Council. Since it was taken for granted that at least two Member States, Germany and Austria, wanted a relatively long transitional period, unanimity would have been out of question. Therefore, our first objective was to get the EU to modify this proposal, to make it more flexible and differentiated. We, of course, proceeded informally, since officially there was no EU common position and the chapter was not yet on the agenda of the negotiations. Fortunately, many member states took the same line. As a result, the final EU common position was a much improved version. Under this common position there will be a general transitional period of only two years. Any extension would require a national initiative on the part of a member state, and in the absence of such an initiative (notification) the acquis, i.e. the freedom of movement, would apply. In addition, it was made clear that even at the beginning of the transitional period, any member state is free to provide as much freedom of movement for workers as it wishes, including full labour market access.
Hungary in its initial negotiating position asked for the immediate full application of the acquis, in other words, freedom of movement of workers between the EU and our country. The EU common position, of course, reflected a different approach. But we recognized that it satisfied at least the criteria of differentiation and flexibility. We realized that the EU common position, shared by all fifteen members, embodied a political reality. There was no point in fighting it, it seemed more reasonable to try to establish arrangements whereby Hungarian citizens would be able to take up work under improved conditions, regardless of whether these conditions are based on Community or on national legislation.
At the meeting of the Accession Conference at the Deputy level on 1 July 2001, we stated our conditions on which we would accept the EU common position. These are: first, a joint declaration or declarations by the member states that the application of national measures would lead to a substantial improvement for our nationals to take up employment; second, we wanted the application of reciprocity which means that as long as a member state applies national measures, Hungary is entitled to do the same vis-ŕ-vis the state concerned.
Our conditions were met. The joint declaration read by the President of the Council at the ministerial meeting of the Accession Conference was satisfactory. It did contain the key words we wanted to hear, namely that "the employment opportunities in the EU for Hungarian nationals should improve substantially upon Hungary's accession". We have also received national declarations, so far five. Most of them envisage the application of the Community freedom for Hungarian nationals immediately upon accession (Sweden, Ireland, Denmark), and the Dutch declaration can be interpreted the same way. Austria has expressed its readiness to define a sensible mechanism of gradual phasing in, leading to genuine free movement. We are, of course, looking forward with great interest to the national regimes the other states, including Spain, are planning to apply. We hope that the national measures will be in compliance with their previous statements that led us to believe that most member states would introduce a liberal regime.
The principle of reciprocity was also accepted. Hungary will be entitled to apply national measures equivalent to the measures applied by a member state with regard to Hungary. In addition, Hungary may apply safeguard provisions with regard to the new member states.
In sum, I would say that the arrangements we have agreed on are acceptable under the present circumstances. I am still convinced that, based on objective factors, no restrictive measures would be needed as regards Hungarian workers. But the negotiations are also about accommodating the concerns or the fears of the partners. If our partners, despite our reasoning, still continue to have problems in a specific area, this is a political reality. Therefore, we had to find appropriate ways to respond to the concerns or fears of our partners. And this is what we did.

9. Hungary has closed, during the Swedish presidency, the chapter related to environmental issues. Which are the main elements in the effort Hungary is making to implement the Community legislation related to environment?

Closing the chapter Environment caused some surprise to observers since it was believed that Hungary was lagging well behind. Several factors made this favourable outcome possible. Firstly, Hungary was not in such a bad shape in terms of environmental protection as many people thought it was. Industrialization never caused damage as severe as in some other parts of Europe. In the last decade, industrial restructuring has taken place. Most of the old and polluting industry has gone. Secondly: the law harmonization of the Ministry of Environment has been criticized for its slowness even by the European Commission. But this work, perhaps not visibly, has been going on and this year has produced tangible results. Finally, we have reviewed our requests for transition and considerably narrowed them in scope and time. I believe that the objective situation has enabled us to undertake an accelerated pace of implementation of the Community acquis. The continued growth of the economy and increased state revenues have created better conditions, allowing us to face our obligations.
It has turned out that the only really long and significant transitional period which was unavoidably needed is for the implementation for the urban waste water directive. Here, one of the transitional periods we have been granted is going as far as 31 December 2015. This is for the fulfilment of the most costly obligation (collecting systems and treatment according to Community requirements in agglomerations with populations between 2000 and 15.000). But it should be remembered that member states themselves were granted long transitional periods. The cost of compliance with Community requirements is high. It is estimated to be around HUF 800 billion (about EUR 3.2 billion). We have developed a comprehensive plan for realization. The use of resources from the central budget, local governments, Community contributions and private funds is foreseen.
The effects of the other transitional periods we have been granted are not really significant: they are very limited in time: 31 December 2005 for packaging waste, 30 June 2005 for incineration of hazardous waste, 31 December 2004 for emissions from large combustion plants.

10. Do you believe that your country will be ready to access the EU in 2003?

Yes, Hungary will be ready to join the European Union on 1 January 2003. Whether this will actually take place is, of course, another question.
It is the firm intention of the Hungarian government to complete the preparation for membership by the end of 2002, except, of course, for those areas where transitional arrangements have been or will be agreed in the accession negotiations. We do accept the principle that "being prepared" means not only carrying out the full transposition of Community legislation, but also being capable of actually implementing it. This requires the existence of an appropriate administrative capacity. We do not object to any verification by the EU, on the condition that transparent and objective criteria are used. To put it simply, the EU should not require more from us than what is required from member states.
Of course, being prepared is not enough to become a member of the European Union. We must also conclude accession negotiations and the Accession Treaty must be ratified.
On many occasions I have heard politicians and high level officials of EU Member States and Community institutions state that the date of accession depends on the candidate country: if a candidate country is prepared, it will be admitted. I take exception to such simplistic statements. Carrying out the accession of a candidate country requires not only the willingness and the efforts of the candidate, but mutual willingness and efforts: the determination and actions of both the candidate country and the EU. If there is no willingness on the part of the EU to adopt a substantive position in sensitive chapters or no willingness to reach reasonable compromises, we certainly will not conclude the negotiations by the end of 2002 as foreseen by the Göteborg Summit. The test will occur soon. It will be interesting to see whether the EU will be willing or able to adopt acceptable substantive positions in such key areas as agriculture or regional policy. I hope that this will be the case.
At the beginning of the accession negotiations, Hungary set for itself 1 January 2002 as the assumed date of accession. The conclusions of the Helsinki European Council forced us to modify this. Now, the new date is 1 January 2003. We do not intend to postpone this date any longer, even if the conclusions of the Göteborg European Council make accession more likely on 1 January 2004. In a historic perspective Hungary's accession in 2004 will still be a great success. But now we have to make sure that it is not delayed any further.